imagine working a 9 to5 to owning a business that does seven figures in 12 months I did this with a subscriber to prove to you that even though he has zero experience you can do it too this is om man he bought a business without having any idea what he was doing while working a 9o5 and he had the owner pay for it what yep how do you know how to do that well I taught him and his lady how to do it let's break it down live exactly what happened what almost crushed them so
you can steal their homework and Playbook step by step wait until you guys see how much they grew this business in just one year what's up enen how's it going what's up Cody so you guys glad you did this oh my God changed our life yay okay I want to break this down today this is our agenda how did this start why do they choose to buy a business instead of start one how did they find a business to buy how much money these guys got how they pay for it how do you do the
same exact thing we're going to break it down soan bought this business and had the seller put 90% of the money down to get it but how big was this bad boy I know in year one when you took over you had what 56 56 day one 56 membership subscriptions to this place right then by today how many you got 420 woo that's not bad year one it was doing 379,000 when you took it over right yeah what about the next year uh 644 wo so we're almost doubling baby and what do you think you're
going to do this here 125 wow 1.25 million dollar not $25 but it probably wasn't always this easy where did you get the idea to buy a business from it was from you let's take it back to the beginning so we met at a coffee shop because man wanted me to describe how exactly do you buy a business we broke down our 10-step process and we got into our secret super proprietary method called The Perfect Fit business first you draw the perfect fit V diagram passion skills Network now first he wanted to buy a laundr
mat bad idea then then we talked about starting a property management business wasn't right then finally a med spa because his wife is a nurse practitioner so Network skills she knows how to do this passion she's obsessed and he's obsessed and great at marketing although probably not great at fillers so ding ding dding we got a winner of a business so now he had to go find a business and I sent him off to do just that and then something crazy happened which is you were like hey I'm going to buy a med spa and
so I became your little accountability buddy I found this text message from you so this one was in 2022 and it was like hey I'm almost done reconstructing the p&l for a med spa what are the items you need to get things moving which is amazing we go back and forth three months later you're like what's up homie I'm closing this on January 15th which is hysterical and then you also say I would love my favorite Patagonia vest back swe which I think I finally returned that you did you did and that's when it was
game on also if you guys haven't smashed that subscribe button like it owes you money what are you doing I don't think it's very natural for people to look at lip filler and Botox and Med Spa and think they're going to buy it what made you decide you wanted to do this industry so I was driving with uh my wife girlfriend at the time and she had gotten her lips done and asked her how much it cost she's like uh $7 $800 I'm like what $800 I'm like how many hours you were you there for
and she's like2 minutes and I'm like how much does that product cost she's like probably like $300 like so she made made $500 profit in 20 minutes that's when I started kind of brainstorming I'm like this is a pretty good business maybe get into yeah you got some margin so you can layer on top of that what else made you like The Med Spa model so I noticed a lot of like inefficiencies and lack of transparency I asked her well how much does everything else cost and she goes oh I don't know you have to
call in I'm like what do you mean just check the website like oh no prices aren't online like so if I want to book something I have to call in like what if it's like after hours like oh you call the next day I'm like you're missing out on customers so that's when I started thinking like oh my God there's so much optimization that you can do with this industry and you went even one step further than that that we'll talk about later brilliant idea you're going to want to stick around how did you think
about starting this business tactically what were the next steps once you figured out you liked the model all right so we talked about it and the first thing is she needs to know how to be an injector so she was a great nurse worked in the hospital but she had no experience and how do you get a job without experience and how do you get experience without about getting the job so that was a little bit of the issue we had and there's Jen now with all the experience in the world say hi Jen how
did you fix the chicken and egg thing so I told her hey why don't we just cold Outreach and email a bunch of smaller Mets spalls you can go in there and just offer to work for free you pay for college you pay for school like this the same thing pay with your time and that's what we did we called ill I think about 20 different Med Spa and one responded to Jen and said actually I need somebody to do the medical consultations and if you do them in exchange I'll teach you everything Aesthetics and
you can Shadow and and learn everything you need to know so many times people don't do things because they say I can't I'm not qualified I don't have the license there's no way but is that an excuse or is that reality excuse you know and the time's going to pass and the time did pass it was you know maybe about 3 2 years that she was doing this apprenticeship while working a full-time job and made it happen and now she you know is the expert now she's teaching people you'll never be able to buy a
business unless you learn the basics about doing business there are five crucial financial documents you're going to need to know how to use read and analyze this is so you are putting yourself in a position to generate a positive return on your investment so HubSpot sent me these templates that are amazing they also sponsored this video so the number one personal financial planning template so you and your family stay in a spot where you can safely buy a business number two cash flow statement this template allows you to stay on top of the top reason
businesses fail cash flow problems AKA don't buy a business with cash flow issues number three balance sheet template so you can review the full snapshot of the business you want to buy number four profit and loss statement template what kind of Debt Service are you taking on is there enough left over to hire an operator and number five Financial projection template maybe the most important document for analyzing an acquisition what's going to happen after you buy it Link in the description if you want to download all five of these for free everyone say thanks HubSpot
so you started out thinking you were going to just start this business and then you realized you were going to buy it yeah why starting a business is actually harder than buying a business and more expensive when you do the math okay let's break this down that machine that's an $80,000 machine this remodel uh about 60,000 how about that chair and whatever those contractions that chair is $2,800 um you know pretty much all the inventory that we have there is probably like another $40 $50,000 wow what about in here that machine there is about $40,000
and then you have a ton more inventory here stuff like this and this another couple thousand yeah when we bought the spa it had about $165,000 worth of Furnishing and equipment so it was either start a business with 0 but you'd have to spend $165,000 to start plus you'd have to wait to get clients because you to build it out I have a lease right now I'm paying a lease I'm paying a front desk I'm paying for marketing so I'm pretty much bleeding money for about 12 months it's probably going to come out to about
the same amount of money as it is to just buy the business but you start profitable from day one and you're breathing you're not worried about like will I even make it I think I was reading a Harvard Business review the other day that said that only 7% of Americans actually own a business less than 10% of businesses will ever hit a million dollars in annual revenue less than 0.4% of businesses will ever hit $10 million in Revenue so every single dollar that you can front run just decreases your risk in ownership it's not that
it's easy it's hard but it is more likely to win with less likelihood of failure yeah you're getting a head start about how you guys felt when you bought a business was it scary yeah I almost grew up several times yeah before signing everything we're like are we sure we're going to do this like did you have a moment where you thought we should not do this we should back out we were almost looking for like a big red flag to be able to like just you know bungee out of there right like almost like
we were looking for an excuse to be able to say why we backed out cuz it was scary but I'm like everything adds up let's like stop being little okay so you finally get over it and then you talk the seller into seller financing explain what happened and how you guys did the deal terms the seller financing I learned from you right uh which I thought was kind of weird I'm like why would the seller want to finance it versus just getting the cash up front and there are many reasons which you've you know talked
and dived into but uh we proposed Stellar financing and she actually was open to it uh cuz I think she wanted to work with us right so she knew that she had to facilitate it and SBA Lo was just going to take too long and we didn't have enough like p&l history and all that so that was easier route when she gave us a price I remembered another thing you said which was your price my terms so I said all right cool let's let's do I'm not going to negotiate on your price but let's do
you know five years 6% interest seller financing on this amount that's amazing how are you guys positioning yourself for somebody you don't know to eventually buy their business so I told Jen whenever the owner feels frustrated just mention hey if you're frustrated I can just buy the business from you I can't remember if it was her that brought it up first or us she was getting very flustered with like patient complaints and she was the only injector and I'm like look I can start injecting like I can also buy your business kind of just like
planted the seed little by little and then eventually she's like you know I'm thinking about selling the business and I was like hey well there was a big problem at one point right which is you guys started digging into the business and you realized holy hell there was no financials so how do we actually even determine what the business is worth and I remember you sent me the p&l and I was like the is this you mean lack thereof yeah so the business almost completely falls apart the deal almost completely falls apart but you guys
recoup it at the last minute what happened I I actually made the p&l for her luckily she used um an EMR which tracked all the sales so I can see like how much sales came from services and products and then she gave me her bank statements so I was able to match the sales to the deposit from you know the merchant into the bank accounts I'm like okay this all makes sense and then I just pretty much built it out for her took me took me a few days but yeah you know you know she's
older single like operator she doesn't have time to be doing all this accounting financing she just knew that the money that the business was making money and she knew that she had more money at the end of the month than she started with and that was good enough which is most business owners right you know and I think the other thing is people use the words pnl and that seems scary but actually p&l is really just a fancy spreadsheet it is but you guys got a hell of a deal I think because there was a
lot of trust she knew you guys weren't going to fly by the seat of your pants she got to meet you and she knew that You' probably pay her back and a lot of the patients too were friends and relationships that she had built so she wanted to leave them with somebody that she trusted she want to just sell to like any random person that you know she didn't know so you end up buying the business for how much $362,000 with about what 2third of that no more than that almost 34 of it seller her
Finance the rest of it you guys use your savings because you had been both working a 9 to5 and you stayed working a 9 to5 yeah up until two weeks ago so through the entire first year you're working your 9o5 making sure everything's okay she kept her job for the first month for the first month cuz I'm like don't quit in case like this business blows up like we need we need that job you guys have both now quit your 9 to FS to go all in on this you guys making more money or less
money than you were making when you were doing it for somebody else she's making more I'm making less next year I'll make more that's amazing so you think within two years of you guys owning the business it will have made you more money than both of your 9et to- FS yeah in a calendar year yeah that's wild and then theoretically if you take a business that was doing $300,000 in revenue and you take it to 1.25 at probably like a what $400,000 profit a year and then you sell that business at $400,000 a year profit
I mean you're looking at a business that you can sell for close to 2 million plus as opposed to the one you bought for 300 right so even if you guys in 2 years were like we're done you could have a nice little nest egg that you take out of this if you sell this bad boy exactly so we had this bad boy which was a scary moment what happened all right so this bad boy is probably like $80,000 previous owner bought it for like 40 Grand because she bought it used works great I had
been treating patients on it and then got to a point where I ran every patient gets a different tip right it's a skin resurfacing treatment so I run out of tips and I'm like oh shoot okay I call the company like hey I need to buy more tips and they're like sure we don't have you registered what's the serial number I go through this whole thing and they're like actually your machine was purchased in the gray Market MH and it's not certified with us so we can't sell you any any consumables what and I'm like
okay how do I get certified and they're like well you got to go through the certification process it's $115,000 get out of 10 what a racket I was at a point where I'm like crap I've got treatments that I've sold on this and now I don't have any tips like what am I going to do we started emailing some Med spas in Austin and Miami just like hey this is what's going on like would you be so helpful to like sell me some of your tips like I'll even pay you more and one medball responded
and they were glad to do so for us so we got lucky with that but I'm still if this thing breaks I'm I'm screwed half the game of business is just not taking no for an answer and thinking of Creative Solutions when the inevitable disaster comes next it's like business is just a carefully concealed series of disasters moving down the highway and I think it's cool for you guys to share that with other people because they don't always know but that is the truth yeah but you know if I had done the deal over again
I'm like okay let me look at these machines are they under warranty where were they purchased from are they certified like but these are things I don't know and maybe if I would have sat down with a Mets spall owner and chatted with that person for an hour and I would have paid them $300 for an hour of their time I would have saved a lot more money yeah I think that is one of the most underrated things to do is you need to have an attorney an accountant and a sector expert MH and as
long as you have somebody that's actually owned the business before they're going to tell you where all the bodies are buried and there's only like that 20% for every industry most of it the same like p&l pretty good you know bank accounts understand the employees fine then you got the $880,000 you don't know you don't know biggest lessons you you guys learned in negotiation cuz it's never a clean process there's always a little sum a little hair on the deal what happened for you too I don't know if I learned it from one of the
Facebook groups or from one of the mods in in your in your course but we bought this business as an asset sale right so we didn't take any of the liabilities that the business had any debts they that they that they owed however imagine telling that to a customer that bought a gift card a year ago and say I have this $500 gift card I want to redeem it I'm not going to say oh I'm sorry that was from the previous owner so I'm like wait we're probably going to have a bunch of customers coming
in wanting to redeem these packages and gift cards that they've bought over the past year so I included into the agreement that anybody that you know came in with gift cards or pre- purchase packages and they redeemed them that we would take it off the principal amount ow smart all right we're calling the segment Hot or Not business Acquisitions did you guys make hot AKA good decisions or bad decisions not first up seller financing Hot or Not hot hot hot second apprenticing absolutely hot do diligence hot or not not not hot hard I guess not
I don't know bot versus started business hot bot is way better yes on Market deals not not off Market deals hot I like it Meda Hot or Not hot hot location hot hot buying another business yes hot yes hot in this episode of hot or not you heard it here first you guys absolutely killed it in this business inside of a year you Forex it that's not normal what do you think the three secrets were to you growing that fast I think starting out number one we're very transparent with our pricing uh We've Gott a
lot of feedback from our patients how much they appreciate knowing how much something is going to cost before they actually show up I'd say number two we're building a community now being in this new location we really want people to feel like they're at a second like in their second home number three under selling I like to be very honest with patients I'll actually tell them like no you don't need more lip filler whatever it may be and just honesty I love it it doesn't take that much to make a small business at 10 because
so many people don't even try I really think what you guys are doing here is pretty beautiful most successful people I've met would say that they're not that smart and they're not experts they just work a little bit harder than everybody else for a little longer than everybody else and the truth of the matter is is that it is in the work we trust that's what makes a Main Street millionaire
